CHARLESTON, W.Va. — Twice a week for the past five months, Khoi Le has made the trek up the steep hill behind 84 Lumber in Elkview to access his salon Le Nail, at Crossings Mall, to feed his two koi fish that still live in a large tank.
Summer is his busy season, when customers flock to Le’s salon for pedicures and other services, but this year was cut short when the massive June 23 flooding washed out the only access bridge to the mall.
Since then, Le said, he’s lost about $15,000 a month — money his business sorely needs to make it through the slow winter season.
With Le and the dozens of other tenants no longer paying rent for businesses they’ve been forced to close until further notice, the owner of Crossings Mall is embroiled in a federal lawsuit with its lender, U.S. Bank National Association.
The bank filed a suit against Tara Retail Group, the mall’s owner, on Sept. 28 for defaulting on a $13.6 million loan.
Since the June floods, Tara Retail hasn’t made any mortgage payments to its lender.
The plaintiff also filed an emergency motion on Oct. 21 to appoint a receiver to head the construction of a new culvert and bridge to Crossings Mall.
The owner of Tara Retail, William A. Abruzzino, is listed as the borrower, along with Rebecca A. Abruzzino.
After a phone conference with the attorneys representing both parties last week, a hearing and settlement meeting was scheduled for Dec. 1.
Judge Thomas E. Johnston is hearing the case. But a few questions need to be answered before he rules on whether to appoint the receiver.
A new bridge is estimated to cost roughly $700,000.
In their response to the complaint, the defendants argue the West Virginia Department of Transportation Division of Highways actually owns the right-of-way on which the culvert was built, and is therefore responsible for building the new bridge.
The Division of Highways disagrees.
“We do not own that structure,” DOH spokeswoman Carrie Jones said this week. “If I have property and allow you to put your trailer on it, and something happens to it, I’m not responsible for [the trailer].”
In other words, just because the DOH granted the owners permission to build a bridge and culvert on its right-of-way, the agency is not responsible for maintaining it, she explained.
According to the division’s Highway Maintenance Manual, the operations involved in maintaining a highway or highway facility in good condition include patching, sealing cracks, blading surfaces, controlling slides, cleaning ditches, repairing bridges and emergency highway work.
“The end results of adequate highway maintenance are smooth, safe and efficient roadways, well-functioning drainage systems and clean and attractive rights-of-way,” the manual says.
Among the months-long squabble between the Crossings Mall owners, the DOH and Kanawha County officials about who’s responsible for paying for the new bridge, attorneys for the Abruzzinos presented documents dating back to 1988, when the owners first sought permits to build the culvert and develop the site.
They claim the documents prove the DOH has some level of responsibility for maintaining the culvert.
One memo, dated May 17, 1988, from the Right-of-Way Division to the Maintenance Division, recommends the area occupied by the culvert and the north approach “be declared ‘excess land’ and offered for sale at public auction. This effectively would remove the maintenance responsibility from the Department of Highways to the developer. This should not be done until culvert design has been approved.”
The Crossings Mall owners argue public sale never occurred, and, therefore, the DOH still is responsible for the new culvert.
A letter dated Nov. 14 from the DOH to the Kanawha County Planning Commission alleges the division is not responsible for maintaining the right-of-way.
“As the mere owner of a right-of-way, the WVDOH has no liability or responsibility for the alleged violations on the Mall property … therefore, the WVDOH has no obligation to take action to address the situations,” the letter says.
The debate left Johnston scolding both parties’ attorneys during a telephone status conference last week.
“The bridge needs to be built, and we’ve got ourselves bogged down [with] finger-pointing and behaving like children,” Johnston said.
He acknowledged there were “good reasons” to appoint a receiver, but said he first wants to meet with both parties and representatives from the DOH, Kanawha County Commission and tenants at Crossings Mall before taking further action.
“My concern is that we really need to have the state involved in this discussion,” Johnston said.
Steven Thomas, of Kay Casto & Chaney, represents Tara Retail. He sent a notice of intent to file a case against the state to Attorney General Patrick Morrisey and Secretary of Transportation Paul Mattox on Nov. 15, arguing the DOH should pay for the new bridge.
In addition, Thomas told Johnston that Tara Retail can’t find a funding source willing to lend it money on a property Tara doesn’t actually own.
Pre-flood repair funds denied
In January, Tara Retail sought the release of funds from a capital reserve account from its lender to address “critical repairs” that were needed on the culvert to Crossings Mall.
A letter from the owner’s accounting manager listed “culvert replacement” as one of the repairs.
“If these issues are not resolved immediately the only entrance to the center could collapse,” the letter says.
It’s unclear what the culvert and bridge’s condition were prior to the flood.
The request of funds for about $24,000 was denied by the lender.
In its response to the complaint, Tara Retail argues the denial to release reserve funds to repair the bridge and culvert “contributed to or caused the damage caused by the flood.”
As hundreds of Elkview residents are forced to drive the extra 13 miles to Charleston for their groceries, prescriptions and other items, at least two tenants, Shoe Show and Rent-A-Center, have vacated the property since the June floods.
The Gazette-Mail reported Bob Evans restaurant closed in the weeks after the floods.
Kroger, the property’s largest tenant, recently sent a notice of default under its lease, according to an initial complaint. Roughly 500 people are still out of work.
In its reply to the defendants’ argument, attorneys for U.S. Bank warn that if the bridge isn’t built soon, paving season will end and work will have to wait until spring.
“The culvert needs to be replaced as soon as possible. Litigation over who should contribute to paying for the costs of replacement can take place later,” the reply says.
It also notes the owners’ argument that the state is responsible is inconsistent with the fact they hired a firm to secure all the necessary permits, site development and design work to replace the culvert. It also identified a contractor willing to build a new culvert for $630,000, the document says.
Kanawha County Commission President Kent Carper told a reporter last week he’s “cautiously optimistic” about the upcoming meeting with both parties.
“There’s enough blame here for everybody,” Carper said. “Hopefully, they’ll come up with some type of compromise to fix the bridge … this cannot continue to just drag on.”
Reach Elaina Sauber at [email protected], 304-348-3051 or follow @ElainaSauber on Twitter.